Malaysia's prime minister Najib Razak dissolved parliament on Wednesday ahead of a general election expected at the end of the month amid a groundswell of support for the opposition.

The National Front (Barisan Nasional) coalition has maintained an unbroken grip on power in Malaysia since independence from Britain 56 years ago, and remains the slight favourite to regain power once again.

However, the opposition coalition, the Pakatan Rakyat (People's Pact), will be hoping to capitalise on the unprecedented inroads it made in the last election in 2008.

"This morning I met the king and asked for his consent to dissolve the parliament," Mr Najib said in a televised address. "This dissolution will pave the way for the 13th general election."

Analysts predict the election will be the closest ever amid concerns over corruption, the rising cost of living and crime.

The 13-member coalition is dominated by the United Malays National Organisation (UMNO), which is led by Mr Najib, who has rebranded it by launching a series of reforms aimed at boosting the economy and granting greater civil liberties.

"For Pakatan Rakyat it is the best possible chance to offer a viable alternative for democracy and a more responsible government. I think the chances of winning are very good amid signs of desperation in the leadership of Najib," Mr Anwar told AFP.

"My major concern is they may resort to fraud during the polls and violence in the run-up to the elections."

Borneo's two Malaysian states – Sabah and Sarawak – may prove to be decisive in the election.

The two states, among Malaysia's poorest despite vast natural resources, kept BN in power in 2008 even as a groundswell of support for the opposition deprived the government of its ironclad two-thirds parliamentary majority.

That could start to change. Allegations of corruption in recent months have dogged the chief ministers of both Sabah and Sarawak, long-time rulers who hold vast sway over some of the world's largest tracts of tropical forests.

Activists and the opposition have demanded free and fair elections, staging several mass rallies calling for change, including a clean-up of the electoral roll which they say is marred with irregularities.

In response, Mr Najib's government has taken steps including the introduction of indelible ink to prevent multiple-voting and allowing Malaysians abroad to vote by post.

But the opposition says these moves fall short of creating a level electoral playing field.

In his announcement of the dissolution of parliament, which was broadcast on national television, Mr Najib urged political parties to observe the rule of law and promised a smooth transition of power if the opposition wins.

"If there is change in power, it will and must happen peacefully. This is our commitment," he said.

He appealed to the electorate not to "gamble" away their votes by choosing the opposition.

Part of the reason the ruling party has stayed in power is due to decades of economic growth.

But criticism of its authoritarian rule has gained traction and the opposition is promising a new era of political liberalisation and an end to entrenched corruption.

It dismisses Mr Najib's reforms as window-dressing, and is pledging to stamp out graft and channel money now allegedly given to government cronies towards free education, cutting taxes and increasing subsidies.

It is also vowing to address complaints of discrimination against minority ethnic Chinese and Indians, who account for about a third of the population.